Congressman Tim Bishop continues to push his manufactured campaign issue, with the full union backing of the Communication Workers of America, to fight against outsourced call centers. He calls it a “surgical strike”. I think there are more appropriate names for it.

It’s always fun to listen to someone who hasn’t spent a day outside of academia or government tell the rest of us, a) what the problem is; and b) what the solution is. The first question that I would ask Congressman Bishop is “why is this such an important issue for your constituents?” Answer: It isn’t. There are no major call centers in his district and there are none that I know of that are weighing a move to his district. So why is this his major legislative focus?

He is desperately looking for an issue, any issue, that he can campaign on. He cannot campaign on his record. He cannot campaign on a record of supporting the Obama economic disaster. He cannot campaign on how much the debt ballooned on his watch. So Doctor Bishop wants to do a little surgery and penalize companies who outsource call centers. Since Bishop never held a job that produced anything for a profit he can be excused for not grasping the impacts of his proposed bill.

One of his provisions is to make companies that have outsourced call center jobs overseas ineligible for government contracts. Two of the largest US PC manufactures HP and Dell and they both have call centers overseas. So does Congressman Bishop want the stop the federal government from buying PCs from HP and Dell? Who should they buy them from? Chinese Lenovo, Taiwan based Acer? Japan’s Toshiba? Speaking like a general he says it is a surgical strike. Well surgical strikes are designed to limit collateral damage, and Bishop’s plan is chock full of collateral damage.

Here is how Bishop could really help the situation. First, take a basic economics course. Study how the global economy works and how free global trade helps everyone. Perhaps he should ask his backers at the Communications Workers of America, what they can do to make call centers in the US more cost-effective. Do they have too many work rules in their contracts? Do they force their members to pay union dues to pay for the union to back Bishop and Obama? If their dues were limited to collective bargaining, perhaps employers could afford more call center jobs in the US. Tell Obama we need to slash the corporate tax rate so that companies do not save billions of dollars by locating operations in overseas countries with lower tax rates and then trap those profits overseas so they can’t be brought back to create jobs here.

But that may be too much to ask of Mr. Bishop before November. So here’s a better idea. Step down, and let someone who has actually created jobs take your place.

That’s my opinion; I’d like to know yours. Please comment below.

President Obama, always on the campaign trail, is now on the road trying to explain why his class warfare strategy is not class warfare. In his State of the Union address, he once again invoked the “Buffett Rule”, which is little more than a fig leaf to allow Obama to raise taxes. But what about some other “Buffett Rules”?

Spending

What is the Buffett Rule on spending? Does Warren Buffett agree with President Obama that we should spend 150% of what we take in? Did Warren Buffett become one of the richest men on the planet by spending 150% of what he takes in and borrowing the shortfall? I think Buffett’s counsel would be to live within our means; don’t spend more than you take in, but I didn’t hear President Obama invoke the “Oracle of Omaha” when he submitted his budget to the Senate that was voted down 97-0. I didn’t hear Obama mention spending at all other than to say some nonsense about cutting spending by $2 trillion over ten years. At the rate we are going that level of spending “cuts” will mean we are $8 trillion deeper in debt ten years from now rather than $10 trillion. We need to cut $1 trillion in spending next year. So let’s hear what Buffett has to tell Obama about spending.

Investing

Warren Buffett is regarded as a masterful investor. What’s the Buffett Rule on investing? President Obama took credit for saving the auto industry. Really? If that is his idea of a good investment why does the price of GM stock have to rise to $52 before the American people’s investment to break even? GM stock is currently trading around $25. How many people are expecting GM’s stock to double in the near future? Or is it more likely that union contracts will once again, drag GM beneath the waves? My research indicates that Warren Buffett does not hold any GM stock. I wonder why? I do know that Warren Buffett made a very tidy profit by investing in Goldman Sachs. Meanwhile American taxpayers, you know, the ones who are under taxed, bailed out that company and many others. How much did Buffett invest in Solyndra? How much money is Warren Buffett investing in high-speed rail in California? Why should the American people believe that someone who has never held a job in private industry (Obama) is suddenly the smartest venture capitalist in America? How big of a portfolio do the real venture capital firms put in the hands of new hire fresh out of college? But this president takes billions of our tax dollars and squanders them on his pet projects and then lectures us how we need to invest in our future when they go belly up. When is Warren Buffett going to tell him to stop?

The Buffett Rule on Taxes

At the State of the Union address we were introduced to the famous secretary of Warren Buffett. She’s the poor woman who pays a higher tax rate than Mr. Buffett on her income. It is estimated that the poor dear makes between $200,000 and $500,000, otherwise she would not be paying double the tax rate of Buffett. That could put her solidly in the top 1% of earners in the country, if she is at the high-end of that range (the top 1% is earnings above $343,000). So Barack Obama actually lamenting that the top 1% is over taxed? Of course not. It is not about who is paying too much, it is about who is not paying enough.

The problem is spending, plain and simple. There are not enough rich people in America, even if taxed at 100% to close the budget gap. What Obama is doing is class warfare. Let’s get people angry enough at the wealthy so that Obama can then link the wealthy to the Republicans and sneak back into a second term.

If Obama thinks he is playing by the rules, Buffett’s rules, then he should at least play by all of them.

That’s my opinion; I’d like to know yours. Please comment below.

Rick Santorum timed the wave perfectly and rode it to within eight votes of Romney in the Iowa caucuses. Whether it was timing or real support is not certain, but where does he go from here, and I don’t mean geographically?

In the 1964 Olympic 10,000 meter race there was an American named Billy Mills. Back in those days they ran on a cinder track and after a while the track would get chewed up and you would lose a little push on each step, sort of like how it feels running on the soft sand of the beach compared to the packed, wet sand down by the water. Toward the end of the race there was some jostling and Mills got bumped out a couple of lanes, but he found firmer footing there and started gaining ground, ultimately taking the gold medal. Rick Santorum in Iowa reminds me a bit of Mills. He chose to run on social issues, while the other candidate focused on economic issues. This gave Santorum some traction with those voters who felt strongly on those issues. But to quote former Clinton adviser James Carville, “It’s the economy, stupid.”

Santorum’s strategy gained for him one of the coveted “tickets out of Iowa.” Well done. But that strategy won’t carry him very far in the nominating process, and definitely not in the general election. He needs to shift his focus to the economy and come up with something bold, if he hopes to beat Romney. If you go to Santorum’s web site and dig a little he has some sensible economic proposals, but they are too timid. If he want’s to beat Romney he needs to put more daylight between him and his opponent’s plans.

For example, he calls for cutting $5 trillion over five years. Mathematically that may not be very different from Ron Paul’s cutting $1 trillion in one year, but if so, just say it. Who knows if Santorum will be around in five years if he was to get elected and in Washington all spending cuts seem to come at the back-end of any time period, while tax increases always happen now. It didn’t take Obama five years to find a way to add more to the national debt than every president since Washington, combined, so why should it take five or ten years to unwind that disaster?

On taxes, he needs to be bold. If you read the tax policies on his website, it is a tweak here and a tweak there. Cain, Gingrich, and Perry all had bold plans. Scrap the IRS and you will add hundreds of billions of dollars to the economy, without raising a nickel in taxes. It may increase unemployment among tax preparers, accountants and lawyers, but that will be more than offset by businesses adding jobs with resulting from their new-found windfall. Eliminate the payroll tax. Congress has revealed what a fraud that is by creating a payroll tax holiday and then saying the Social Security Trust Fund will not face any shortfall. Why have multiple tax structures and mechanisms and associated bureaucracy if Treasury will just shuffle the money around as they see fit anyway? Why not pick up Cain’s 9-9-9 plan? Cain is out of the race, but Santorum would almost immediately pick up Cain’s support and many of his followers. Hell, for that matter, he should be even bolder and ask Cain to be his running mate if nominated.

Without a stark choice, Romney will probably end up the nominee. If Romney doesn’t start convincing conservatives that he has mended his ways, they may choose to stay home, but if they do, I don’t want to hear any griping about Obama if he gets reelected. If Santorum is bold, it will force Romney to be a little bolder to protect his right flank. If nothing else, we need whoever is the nominee to be battle hardened for the general election. This one won’t be pretty.

That’s my opinion; I’d like to know yours. Please comment below.

In his recent telephone town hall meeting, Tim Bishop expressed his support for the continued payroll tax holiday but making it clear that it would have no impact on the Social Security Trust Fund. Money for Social Security would continue to go into the trust fund from other sources. What other sources you might ask? I may have an answer for you.

In an article in HousingWire magazine, the author points out that:

The Federal Housing Finance Agency will increase guarantee fees on single-family mortgage-backed securities charged by the government-sponsored enterprises by 10 basis points effective April 1, 2012, in response to the new funding mechanism for the payroll tax cut extension passed by Congress.

So it seems that the Social Security Trust fund will get its money from Fannie Mae and Freddie Mac, or more accurately, from new home buyers. So for a two month extension of the payroll tax holiday that will prevent taxpayers from paying an additional $130 into the Social Security Trust Fund, that everyone expects to get back anyway, new home buyers will have to pay thousands in new fees.

The g-fee increase will remain in effect through Oct. 1, 2021. The Congressional Budget Office estimated the g-fees would offset about $35.7 billion in the costs of the tax cut. Mortgage Bankers Association CEO David Stevens said the increase could mean an extra $4,000 in fees on a $200,000 mortgage.

One of the problems facing Long Island is affordable housing. Our young people are leaving Long Island for areas were there is a larger rental stock that they can start out in, rather than living in mom and dad’s basement, and where they can afford to buy a house after saving a down payment for a couple of years. Apparently for the benefit of a political talking point Tim Bishop votes to slam an already weak housing marking with additional fees. After all who can really call a two month anything sound fiscal policy? Notice there is no spending cut mentioned here, it is an increase in taxes and fees. This is what Tim Bishop was telling his constituents not to worry about in his town hall meeting? What will become of his district, if nobody lives here but retirees? Is that his plan to solve the unemployment problem? Drive enough young people away until the number of jobs fits the remaining population?

The problem is spending. It was only last week that Joe Biden was attacking Mitt Romney’s policies by saying:

“His proposal would actually double down on the policies that caused the greatest economic calamity since the Great Depression and accelerated a decades-long assault on the middle class,” Biden added.

Decades long assault on the middle class? I guess he means you too, Bill Clinton. The greatest economic calamity since the Great Depression has been the Obama administration and if he were to get reelected it would finish America off. We have had the worst consistent unemployment since the Great Depression for the entire Obama administration. We have had the worst record of job creation, loss actually, since Herbert Hoover. The National Bureau of Economic Research says the recession ended in June of 2009. Does it feel like it to you? Most recoveries from economic downturns are mirror images of the slump. A gradual recession is followed by a gradual recovery; a sharp downturn is followed by a sharp upswing. Not this time. Just look at the job creation record of Team Obama.

This chart goes all the way back to Harry Truman and Obama’s performance stands alone.  Let’s put to rest the “eight years of failed Bush policy, yada, yada, yada” and face the fact that Obama and his spending, heavy-handed regulations, and insatiable appetite to fix everything by taxing more has put us into an economic winter. Tim Bishop has happily ignored the needs of his constituents to buy favor from the Democratic leadership and their special interest pals. They have done an awful job and we need to turn them out, before they turn us into Greece.

That’s my opinion; I’d like to know yours. Please comment below.

With the economy in shambles and his campaign sound bites and early interviews as president coming back to haunt him, President Obama has ramped up the class warfare rhetoric. Let’s put the lie to these strategies.

The Payroll Tax Cut

The issue here is that President Obama wants to help the middle class and he claims the Republicans do not. The famous payroll tax cut puts about $8 a week in the pocket of individuals. But everyone who pays the payroll “tax” expects to get every dollar back, and then some, after they retire. So what is really going on here? The government forces you to participate in the Social Security system. It offers a lousy rate of return compared to alternatives and if you die before you start collecting, everything you paid into it is gone. Your heirs get nothing. If Obama believes in cutting back on payroll taxes, why not convert everything to private accounts and eliminate the tax altogether? Let people save for their own retirement. Let them put more away in the good times, and be able to scale back in the bad times.

The Republicans are not opposed to Obama’s plan, their only requirement is that we cut somewhere else in the budget to make up for the shortfall. This is nothing new. Former Kentucky Senator Jim Bunning raised this very point nearly two years ago, when the Democrats held both houses of Congress. In this enormous government can’t we find anything to cut? Find the cuts and the Republicans will sign on. If not, this is just another case of piling debt on our children and grandchildren, because they will have to make up the difference when we retire.

Taxing the Rich

This week we saw former senator and former New Jersey governor, Jon Corzine testify before Congress to say how sorry he was that he couldn’t find over a billion dollars of his customer’s money. But since he resigned from MF Global he doesn’t have access to any of the records to help in the search. Is the Justice Department beginning a criminal investigation?

Has anyone been charged with a crime for what happened in the fiscal meltdown of 2008? Has anyone collected more campaign cash from Wall Street than Obama? So is it unusual to conclude that President Obama, other than giving speeches, is perfectly fine with Wall Street ripping off the American people, as long as he can rip off the most successful people in America and claim he is looking out for the little guy. Let his pals get boatloads of government money to bail out their companies so they can keep getting richer and then say he wants to tax them more. Is it any surprise that a lot of rich Democrat supporters are coming out and saying they are all for paying more. Who wouldn’t?

President Obama says you can have billions of tax dollars and I just want a kickback in the form of higher taxes so that I can keep spending recklessly. However, ask anyone of these guys to write a check to the Treasury voluntarily, and they all balk. Why? Nobody gets any credit for donating their money to the government. They want the government to take it, not just from them but from every successful business person.

An Economic Winter

If President Obama gets another term, we may face an economic winter from which we may never recover. If the last three years were painful, the next four could be even worse.

That’s my opinion; I’d like to know yours. Please comment below.

Jon Corzine, one of those very smart Wall Street guys, the former head of Goldman Sachs, testified before Congress today to answer questions as to what happened to his firm MF Global, which is now one of the largest bankruptcies in US history. There is over $1 billion unaccounted for. He simply doesn’t know where it went. This is the guy that Obama and Biden praised when they took office as the first guy they would turn to in the midst of the economic crisis. It explains a lot about where we are today.

http://www.youtube.com/watch?v=xm3VMrKqJSA

It seemed that as long as Corzine sat in the cat bird seat of crony capitalism, where if your big bets pay off you rake in the dough and if they go south, you hand the bill to the taxpayers in the form of bailouts because you are too big to fail. Take him out of that role and he acts the same way, but without the safety net you see the results.

What Corzine did, after driving New Jersey into a ditch that Chris Christie is digging out of, he bet heavily on the debt of foreign countries. Oops! It seems like he believed that governments never run out of money, but sadly they do. And we will face the same fate, but who is steering our economic ship? The two guys who think Jon Corzine is brilliant. Jon Corzine is the first guy that Joe Biden and Barack Obama called upon taking office. Is there any wonder that their plan has been a disaster? Is there any wonder that no one on Wall Street has been pursued by the Justice Department? Is there any wonder that they are trying to kill the free market economy by regulating out of existence the things that people actually want to buy and heavily subsidize things that they don’t? Every day we hear a new report of more billions going into green programs that we will never see a return on.

It’s time to drop the curtain and get the hook. These clowns are not the least bit funny.

That’s my opinion; I’d like to know yours. Please comment below.

Drawing by DonkeyHotey

Rather than do their job, Congress and the President designated a super committee to do it for them. The committee failed miserably.  But what exactly were they shooting for?

Since we are talking about Washington, you have to listen carefully lest you believe they are actually trying to accomplish something significant. Since President Obama took office, annual deficits north of $1 trillion are commonplace. The committing was working on cutting $1.2 trillion, so that would fix the problem, right? Wrong. That $1.2 trillion they they were unable to come up with was over ten years, not next year. But it’s okay, they have a fall back plan. If this committee of $174,000 per year public servants and their staffs couldn’t reach an agreement then automatic cuts will come into play, half against defense spending, half against non-defense spending.

The stalemate was along familiar lines. The Democrats wanted massive increases in taxes, the Republicans were opposed to any tax rate increases. That last point is important because Republicans put on the table more revenues through closing loopholes, but it was not enough for the Democrats.

Citizens to the Rescue

I was in Washington last June with a group of Tea Party leaders who gathered to discuss our future plans. At that gathering the idea of a citizen’s debt commission was hatched. Why not have everyday citizens put together their thoughts on spending cuts and see what they could come up with? Nominate a core number of individuals, and then hold a series of town hall meetings around the country to discuss what Washington should stop doing to help balance the budget. In addition, set up a web site where citizens could vote on some of the proposals and decides between alternatives. For example, the alternative of repealing ObamaCare compared to any other spending cut in a one-on-one comparison (e.g., repeal ObamaCare or cut the Department of Education) ObamaCare lost 93% of the time. Similar comparisons were made and citizens voted on them.

The result was a report from the Tea Party Debt Commission. No increase in taxes and savings of nearly $10 trillion. That is not a target to be reached through future haggling. Those are identified spending cuts. This committee of volunteers (not $174,000 per year politicians) did what the super committee could not. They came up with the goods, the super committee folded like a cheap lawn chair. Here is the Tea Party Debt Commission report (Click here).

A Funny Thing Happened on the Way to Washington

With the report completed, Senator Mike Lee arranged to host a meeting where the Tea Party Debt Commission could present their findings in the Capital building. I talked about the ideology of taxes versus no taxes, here is where the arrogance comes in. As Senator Lee is about to convene his meeting, he finds that the microphones that were going to be used were confiscated. Why? New York Senator Chuck Schumer, Chairman of the Senate Rules Committee said that holding mock hearings was against Senate rules. Here is Senator Mike Lee, trying to understand why the First Amendment isn’t allowed in our nation’s capital.

http://www.youtube.com/watch?v=lKCnz_RgIOE

So, our august legislators couldn’t come up with a measly $1.2 trillion, which by the way doesn’t cut spending, it merely slows it down some, and a bunch of citizen volunteers came up with a plan, in the same timeframe, ten times as large that actually does cut spending, actually does balance the budget, and actually does start reducing our nation’s debt. Yet, our elected representatives, our employees, didn’t even want to hear what that citizen’s committee found and wanted to do whatever they could to prevent others from hearing it.

Turn them out. In 2012, if they don’t want to hear what we have to say, how can they possibly be representing us? Senator Schumer is one of those individuals who thinks he is smarter than everyone else (after all he scored 1600 on his SATs), and who has spent his entire adult life in government. Although Senator Schumer is probably a very wealthy man by now, it’s time for him and those like him to experience the private sector first hand.

That’s my opinion; I’d like to know yours. Please comment below.

photo by cliff1066

Just because Democrats are statically stuck on stupid, why do they think everyone else is? What I am referring to is static analysis of changes to the tax code. Democrats always want to have any potential changes statically scored. In other words if Democrats raise rates 10%, naturally, the government will get 10% more revenue. If on the other hand you cut tax rates 10%, a very bad thing, tax revenues will fall 10%. The problem is that they have been proved wrong every time. In other words, Democrats believe that if they raise tax rates you will be too stupid to change your behavior in response.

The evidence is in that when capital gains tax rates were cut, revenues poured into the Treasury. When the Bush tax cuts went into effect in 2003, by 2007 the Treasury took in more revenue than at any time in history.

Federal Government Revenue over Time

So why, do we have massive deficits. There are two reasons and neither of them have to do with the Bush tax cuts. The first is the housing bubble bursting. This put us into a recession and when economic activity slows, tax revenues fall as well. As the economy recovers, tax revenues will increase. This bedrock principle is what the Democrats deny exists. The second reason is spending. We are spending an enormous amount of money. If you want to see the deficits shrink, stop spending, and stop attacking businesses.

The Latest Dustup

The much ballyhooed debt committee that is supposed to come up with their recommendations by Thanksgiving has reached another impasse. The Republicans put $500 in additional revenues by locking in lower tax rates, and closing $250 billion worth of loopholes. The resulting growth in the economy would add another $200 billion and another $40 billion would come by adjusting the tax brackets for inflation. I thought the Democrats were agreeing with Herman Cain when they said, “Nein, nein, nein!” until I realized they were speaking German. To the Democrats lowering the tax rates has no effect on the economy, so the $250 billion in loophole closures will only generate $250 billion.

So as the clock ticks down, you can expect the committee to remain stuck on stupid, and our military to take a big hit as mandatory, pre-negotiated cuts kick in. Isn’t it gratifying to pay a bunch of people $174,000 a piece to have them accomplish absolutely nothing? Isn’t that how it is where you work?

That’s my opinion; I’d like to know yours. Please comment below.

Photo futureatlas.com

With several proposals to overhaul the tax code on the table, it will be interesting to hear how the Obama team will respond. In the plans put forth by Cain, Perry, and Gingrich, people grasp the flat tax part pretty easily. With Herman Cain’s 9-9-9 plan, a common sticking point is the last nine, the national sales tax. Whether intentional or not, it seems to me that they don’t understand it.

I have heard a couple of criticisms that reveal a level of misunderstanding, one coming from Rick Perry and another from Bill O’Reilly. In the former’s case, he warns the folks in New Hampshire, which does not have a state sales tax, about increasing their “tax footprint.” In the latter case, Mr. O’Reilly on his nightly program The O’Reilly Factor asked if people in cities like New York which has a high sales tax local level above 8% are going to revolt over a 17% sales tax if you add the national rate into it. Let me illustrate with an example.

Bill O’Reilly has a new book out called Killing Lincoln. It has a list price of $28.00. Let’s say Wal-Mart decides to offer it, nationwide, for $20. If the Cain plan were in place it would look something like this. If I walked into my local Wal-Mart and picked up a copy of the book off the shelf and looked at the price, it would be marked $20. I decide to buy it. I go to the checkout line. Here in Suffolk County, NY, the local sales tax is 8.625%. The cashier would ring up the sale and I would pay $21.73. The added sales tax would represent 8.625% of the purchase price just like it does today. When I look at the receipt, there will be another line of text on it that would read something like, “$1.80 in federal tax is included in the purchase price.”

Now if I go up to New Hampshire, which has no state sales tax, and buy another copy at a Wal-Mart there, when I get to the check out line they will charge me $20. No added sales tax. The receipt that I receive will also have a line of text on it that says “$1.80 in federal tax is included in the purchase price.” Does anyone foresee riots in the street? Does anyone sense a revolt over this new national sales tax? Since the process is basically the same, in that the same local sales tax or none if that is the local situation, is added to the price on the product, just as it is today, would people react differently because the embedded federal taxes are shown rather than hidden?

The difference is that the national sales tax is inclusive, just like your income taxes are today, while state and local sales taxes are exclusive. Does that mean that prices for everything will go up by the amount of the sales tax? No. The plan also eliminates the payroll tax, and lowers the corporate tax rate from a top rate of 35% down to 9%. These taxes are imbedded in the cost of everything we buy today. At every step of production you have companies and workers. If every company is assessed an income tax of 35% and for every employee the employer has to fork over payroll taxes of 7.65% of their payroll, for every step in the process these taxes get built in. Do away with the payroll taxes and cut the income taxes and these costs go away. The prices of goods should drop and the sales tax is added only at the last step (it is not a Value Added Tax), and only on new items. If you buy a used car, no sales tax, because it was already paid when the care was new.

There are other questions, such as will the costs of goods actually fall or will those greedy SOBs pocket the savings, That will be the subject of future posts, as well as the peaceful coexistence or evil of an income tax and a sales tax. But for now…

That’s my opinion; I’d like to know yours. Please comment below.

photo by chasingfun

It is no surprise to anyone that we have a government that is out of control with spending. We have the Tea Party and OWS agreeing that crony capitalism is out of control. So what does this have to do with the tax code?

There are two ways that the government sticks it to its citizens, and more specifically the taxpayers, you know, the 53%. The first is by out of control spending. Spending is the more obvious culprit, and the one that is coming under greater scrutiny, particularly by the Tea Party. Earmarks have been curtailed, at least temporarily. We have the President trying to push through Stimulus II, but finding no help in Congress because of the waste and ineffectiveness of Stimulus I. Add to that Solyndra, and other spending and they are really starting to feel the heat.

The other way that the government sticks it to the taxpayer is through its manipulation of the tax code. Through tax subsidies and loopholes, politicians and lobbyists conspire to slow the amount of taxes flowing into the Treasury as the spending speeds the outflow. The problem is that the manipulation is harder to see, is strongly backed by lobbyists who make millions advocating for their clients, and as such it is harder to fight.

There have been several proposals put on the table by Republican presidential candidates ranging from 9-9-9 by Herman Cain, to a 20% flat tax by Rick Perry, to a 15% flat tax by Newt Gingrich. Cain’s plan is different in that it contains a national sales tax component, and if you read the plan on his website, it is an intermediate step to the Fairtax, which eliminates all income taxes, personal and corporate, and replaces it with just a sales tax. I have long been an advocate of a flat tax, but an interesting point was made to me. The income tax that we have today, began in 1913 as a flat tax of 1%. It was only if you made more than what would be $374,000 in today’s dollars before additional taxes kicked in.

If you tax income, then it all depends on how you define income. If you tax consumption, it is much more straightforward and harder to manipulate. If you buy something for $100 with an inclusive sales tax, the tax is embedded in the $100, it is not added on like state and local sales tax which are exclusive. This a common misconception. But if we want to clean up the mess, send the lobbyists packing, and make it harder for Congress to manipulate the code behind the scenes, a consumption tax seems to be the best way. I am sure this will trigger a lively debate, so…

That’s my opinion; I’d like to know yours. Please comment below.